Bent and others v Central Manchester University Hospitals NHS Foundation Trust ET/2400833/11 and others
Date added: 10 May 2012
unlawful deductions from wages | breach of contract | pay progression | sickness absence
In this test case, the employment tribunal found that an NHS trust had unlawfully amended its pay progression policy to provide that staff would be denied a pay rise if their sickness absence reached a certain level.
Employers should be wary of introducing a rigid sickness absence policy triggering action on a small number of separate periods of absence (for example, four).
There should be discretion for managers to defer taking action where to do so would be manifestly unfair, for example, where a conscientious employee's genuine attempts to return to work while ill result in separate periods of absence.
It is always dangerous for employers to make a direct link between "satisfactory performance" and absence levels, as a capable employee who becomes ill through no fault of his or her own can still meet expectations.
The Central Manchester University Hospitals NHS Foundation Trust was under pressure to cut costs and identified sickness absence as a particular problem. The trust calculated that sickness absence had cost £26.5 million in 2009/10.
The trust had agreed a new sickness absence policy with the Local Negotiating Committee and Trust Joint Negotiating and Consultative Committee (TJNCC). The policy was implemented in October 2009. The new sickness absence procedure was triggered either by:
- four "occasions" of sickness absence in a rolling 12-month period; or
- 18 days' sickness absence in a rolling 12-month period.
Under the procedure, an "occasion" could be as little as a half day, for example someone coming to work in the morning and being sent home later in the day. Once either of the two conditions was met, an informal counselling session was to take place, although this could be deferred at the manager's discretion if the employee in question had a previous good sickness absence record.
In May 2010, the trust's board, faced with further budgetary constraints, proposed freezing incremental pay progression for staff whose levels of sickness absence triggered its sickness absence procedure. The only exceptions would be sickness absence related to disability, pregnancy or maternity, as well as absences for which the trust was directly responsible. The trust informed the TJNCC that, from 1 October 2010, incremental pay progression would be restricted for staff who reached the sickness absence trigger and their pay rises would be postponed until their individual appraisals in the 2011/12 financial year.
The TJNCC protested that linking pay progression with capability defined through sickness absence was unfair on staff who were genuinely ill and was a breach of the Agenda for Change terms on pay progression. After a series of meetings and protests, the staff representatives raised a collective grievance on the basis that the new pay progression policy amounted to:
- a breach of the Agenda for Change terms;
- a unilateral variation of the trust's policies, constituting a breach of individual contracts of employment; and
- an unlawful deduction from the wages of staff affected.
The staff side argued that Agenda for Change does not allow for pay progression to be deferred as a result of low attendance, other than in cases where significant weaknesses in performance have been identified, discussed and documented, and training and support has been offered.
In October 2010, the trust rejected the staff side's collective grievance on the basis that Agenda for Change does not give staff an automatic right to pay progression. The trust said that, although "performance" is not defined, the terms of Agenda for Change allow individual trusts to "incentivise and reward for performance when an employee meets set objectives" and allow individual trusts to interpret locally what they believe amounts to "satisfactory performance" as befits their organisational needs.
The trust refused the staff side permission to refer the issue to the NHS Staff Council, which can determine disputes over the terms of Agenda for Change.
The six test claimants (a total of 83 claimants were party to the proceedings) sought a declaration that they had suffered a series of unlawful deductions from wages arising from the trust's pay progression policy. The test claimants were:
- Emma Westlake, a physiotherapist who took 28 days off after her mother was taken ill suddenly and was advised by her managers to take the time off as sick leave;
- Sandra Kaye, a medical technical officer who was assaulted and returned to work before the end of the 18-day threshold, but was sent home as unfit for work;
- Dr Caroline Browne, a senior clinical psychologist with a very good absence record who attempted to return to work after three periods of absence despite not being fully fit, and was sent home, meaning that she had four "occasions" of sickness absence in a year, despite taking only eight days' absence in total;
- Susan Proctor, a nurse who required emergency surgery for appendicitis, although she had a good attendance record in previous years;
- Karl Taylor, a nurse whose foot injury caused him severe pain and prevented him from standing or walking for long periods; and
- Doreen Allet, a nurse who had four occasions of absence as a result of vomiting and abdominal pain and the medical tests that followed.
The employment tribunal noted that the sections of Agenda for Change on pay structures, which are expressly incorporated into individual employees' contracts of employment, set out in detail how the pay progression system should work. They do not give any discretion at local level as to how the rules are applied. The tribunal also noted that Agenda for Change has to be interpreted consistently with the NHS Knowledge and Skills Framework.
The tribunal said that Agenda for Change, read in conjunction with the NHS Knowledge and Skills Framework, requires that employees' performance be "satisfactory" and that they "demonstrate the agreed knowledge and skills" for their pay to progress. The only ground for the deferral of pay progression is that there are "significant weaknesses in performance" that "prevent a staff member from continuing to apply consistently, across a recognised normal workload, the knowledge and skills...without continued supervision and support inappropriate to the post". The tribunal highlighted that this definition does not allow for reliance on extraneous factors such as sickness absence to defer pay progression. Further, Agenda for Change does not allow for deferral unless there has been prior discussion with the individual and he or she has been given the opportunity to improve.
The tribunal held that permitting a trust to measure "performance" by reference to sickness absence undermines the carefully constructed pay progression scheme under Agenda for Change. The tribunal did not accept that absence automatically has an impact on assessing whether or not an employee's performance is "satisfactory".
The tribunal accepted that the application of the sickness absence triggers to pay progression resulted in "unfair, inconsistent and arbitrary" consequences that the parties that originally agreed to Agenda for Change cannot have intended. The tribunal gave the example of Dr Browne, who was in effect penalised for her attempts to return to work. If she had remained at home, her absences would not have triggered the threshold of four "occasions" of absence. Similarly, Ms Westlake had been denied a pay rise because she had taken sick leave at the request of her managers.
The tribunal concluded that it was inconsistent with the national terms and conditions for the trust to adopt a local policy that provided for the deferral of pay progression on the basis of a particular level of sickness absence. The claimants had been subjected to a variation of their terms and conditions of employment to which they had not consented, and unlawful deductions from their pay.